Non-financial group declaration

The technotrans Group with its head office in Sassenberg achieved revenue of € 205 million in the 2017 financial year. With around 1,330 employees, technotrans is represented at 19 locations worldwide. In the field of its core skill liquid technology, technotrans offers an extensive range of solutions for cooling, temperature control, filtering/separating and spraying/pumping of liquids. The group’s products are used in a wide variety of markets. For historical reasons, technotrans enjoys a strong presence in the printing industry, but also provides solutions in industries and markets such as the laser industry and mechanical engineering, the plastics industry, medical technology and energy storage technology. As well as selling equipment, the group offers a wide range of services. These include the parts supply, as well as system repairs and installations.

The technotrans technical is highly dependent on the development of these industries and markets, and on the technical challenges that are brought to it by customers or need to be met for legal reasons. Our products are resold B2B mainly by the group-owned sales and service companies. We generate around 60 percent of our revenue through direct OEM business.

As an internationally active group with six production locations each with varying levels of value added and a high, ever-increasing range of products, we are also exposed to a value chain that is becoming more complex. In essence we work with suppliers in 13 different countries. When selecting suppliers, we look at criteria such as quality, price and availability, but also at aspects such as safety, environmental protection and short transport routes. Our suppliers must also confirm to us that their products do not contain any conflict minerals. We source the bulk (over 90 percent) of our purchased materials locally, i.e. the supplier is in each case located in the same country as our production company. This avoids unnecessarily long transport routes. Likewise at the sales end, the greater part (around 60 percent) of revenue is generated locally. Locally means that the country of a product’s sale is the one where that product is manufactured, and that services are provided by a service company in the same country.

As a group with global operations, we are also constantly exposed to dynamic conditions and therefore perpetually confronted with a wide variety of opportunities and risks. Our priority is to conduct a constructive debate about opportunities and risks and to address them openly, so that we can assure the permanent success of our entrepreneurial activities. An effective risk management system tailored to the group of companies and an internal control system not only comply with the legal requirements, but in particular help secure the entrepreneurial targets as well as long-term viability and competitiveness.

It is important to us that all corporate decisions conform to laws, internal rules and voluntary commitments. technotrans accepts that responsibility worldwide in a variety of ways, for instance through its commitment to the Global Compact initiative of the United Nations (UN), or through the steadily evolving group-wide Code of Conduct introduced in 2011. We always base our actions on the THINK-LEARN-ACT corporate philosophy that is actively practised throughout the entire group.

The UN Global Compact is a strategic initiative that seeks to promote corporate social responsibility and sustainability in organisations and enterprises. Its centrepiece is ten universally acknowledged principles spanning human rights, labour standards, environmental protection and anti-corruption measures. We have been a member of this initiative since 2006 and play an active role in furthering its long-term goal – to define the social and ecological aspects of globalisation – while also consciously measuring our activities and strategies against these standards. Implementing the ten principles is a permanent challenge in our day-to-day operations and business decisions. Since signing up to the Global Compact, we have regularly published a progress report. The most recent one was dated April 12, 2017. The next progress report is scheduled for April 2018.

In 2016 we again revised our main guidelines, which had until then been enshrined in various parallel directives, and brought them together in our technotrans Code of Conduct (Compliance Directive). Our Code of Conduct defines standards on how our employees should deal with each other and on conduct towards stakeholders such as customers, suppliers, government agencies and business partners. The Code of Conduct is binding for all technotrans Group employees. Every employee worldwide is handed a copy of our technotrans Code of Conduct when they are taken on. The Compliance Directive can also be accessed over the intranet by any employee, and on the internet by any business partner of technotrans. Based on our concept, we also plan to introduce a group-wide e-learning programme. Its purpose will be to give employees regular computer-based training on topics such as compliance with employment standards, data protection, IT security, anti-corruption and environmental protection. Our aim is to use this channel to provide all employees with training on our Code of Conduct.

To assure compliance with statutory requirements and voluntarily adopted principles, there is a compliance organisation within the technotrans Group. The technotrans Board of Management bears overall responsibility for it and for our sustainability strategy. The officers at the regional and national companies have expressly undertaken to comply with it; at their individual locations they manage and monitor implementation of the group regulations, and compliance with the statutory requirements and voluntary commitments.

A compliance officer at technotrans coordinates, trains and checks worldwide implementation of the compliance regulations as well as any updates to those rules. Three audits were carried out in the 2017 financial year. As part of their respective compliance and supervisory duties, the Board of Management and Supervisory Board are informed regularly and in acute cases of the current status of compliance activities, and also actively obtain such information.

Group-wide risk management also plays an indispensable part in shaping our strategic emphasis on sustainability and helps us to identify potential risks and opportunities promptly. Our subsidiaries report quarterly on the risks to which they are exposed. In acute cases, information is circulated at short notice. For further information on this topic, please refer to the “Risk Management and Internal Control System” section of this Combined Management Report.

In recent years, technotrans has acquired companies of widely varying structures and sizes. Integrating the newly acquired companies into the group strategy and compliance structure swiftly and comprehensively repeatedly presents us with challenges. In the course of integration, all material processes required are gradually analysed and assimilated as necessary, with the goal of also implementing all standards and guidelines of the group at those companies as swiftly as possible. In view of rapid inorganic growth, the full harmonisation of those processes, standards and guidelines has not yet been completed. We are working continuously towards those goals.

Acting responsibly and lawfully is of key importance for technotrans’ success. technotrans has set itself the task of steadily increasing its involvement in and commitment to the area of sustainability. Sustainable action is naturally part of its day-to-day work. The remuneration of our managers also reflects to what extent corporate and individual goals are achieved. Depending on area, sustainability targets may also be relevant.

We identify relevant topics in the sphere of sustainability as those which have high significance for our business success and where technotrans can contribute particularly to a sustainable development, as well as areas in which the activities of the technotrans Group have a major impact on sustainability aspects. Particularly in the context of corporate acquisitions, new topics may come into focus that were not previously considered or assessed to be materially significant. The requirements of our stakeholders are another important point of reference here. We therefore maintain a regular dialogue with our main stakeholders, our employees, customers, shareholders, suppliers and other stakeholders. We use a variety of information sources and dialogue formats to that end. We draw a distinction between internal corporate communications that take place within the group and external communications that are aimed at a wider audience, such as customer communications, public relations (PR) work and financial market communications.

Communications with employees within the group are handled mainly by performance reviews, the intranet, emails, works and other meetings. Internal corporate communications may also span multiple locations. Employees are kept up to date about relevant developments and have the opportunity to put forward their own suggestions. technotrans uses customer communications to address existing and potential customers, with the purpose of winning them over to its products and services and building up a long-term relationship. Communication often takes place face-to-face or at trade shows. Communications with investors, analysts and shareholders are covered by the “Investor Relations” area. Regardless of whether someone is a shareholder or merely interested in the company, and whether they hold a large or small number of shares, we provide them with written reports – in keeping with the statutory requirements – as well as explain individual aspects and answer questions in telephone conferences or face-to-face talks. The main component here is communications with the shareholders in connection with the Annual General Meeting. The result of an information policy that is candid and open to scrutiny is a relationship of trust with all capital market operators, based on mutual respect, and our company values it very highly. Findings from these dialogues also help define our business activities, the development of new products and services, and the priorities for our sustainability management work.

We believe the non-financial aspects presented below currently play a major part in the business performance and success of the group. In addition, the effects of corporate activity on the non-financial aspects are considerable. We have also listed a number of topics that do not fully meet the statutory principle of materiality but are regularly discussed with our stakeholders, and as such are to be considered materially significant.

a) Environmental matters

Growth in economic output worldwide will very probably also lead to increasing demand for resources. The overall pressure on the available resources will therefore continue to rise over the next few years. We consequently need innovations and technologies that pave the way for reduced consumption of materials and commodities. With our many years of experience in sustainable business, we are pursuing the concept of developing and realising viable solutions to this problem in partnership with our customers.

Environmental aspects influence the development of our products to a considerable degree. The decisive factors include statutory requirements which we are obliged to meet. They include the implementation of the Ecodesign Directive, for example. Then there are requirements presented to us by our customers, for example increased energy efficiency. Through our solutions, we therefore help our customers to manage energy and resources, and reduce their carbon footprint. We also look at energy and resource management in terms of our own entrepreneurial activity, to identify efficiency improvements.

Product development:
In the main, products are developed at our German production locations. The product development process is governed using internal procedural instructions such as the “Product Engineering/Discontinuation Process” procedural instruction of technotrans AG. New developments are often created in close partnership with our customers to ensure the desired results are also achieved at the customer. From the ideas phase to realisation, the innovation process for new products is standardised and passes through “quality gates” (defined stages in our internal due diligence process) to measure progress over time during product development and keep sight of the project’s internal cost effectiveness. The project manager’s permission is required to pass through a gate, or the permission of the Board of Management for certain key gates. Feasibility studies, internal tests and field tests are used during the development phase to assess regularly whether the defined targets have been achieved, so that prompt corrective action can be taken if required. This approach is designed to avoid wrong developments if at all possible. The development departments of the individual companies share information closely, and similar projects are developed from the outset across the whole group. We also work with universities and research establishments in the field of research, and support students with various projects and bachelor and masters theses.

At December 31, 2017 there were around 25 projects in product development within the group, many of them still at an early stage of development, so their completion is still highly uncertain. Other projects were brought to fruition in the financial year and were able to contribute to revenue. Many of our development projects in the year under review also brought benefits by protecting the environment. Overall development spending for the group has developed as follows over the past three years:

For further particulars of development spending, we refer to the Notes to the Consolidated Financial Statements in the notes to the balance sheet 3) "Intangible Assets” and to the profit and loss account 22) "Development Costs”.

Our components and systems are put to use in various industries worldwide. The range in essence comprises technologies and processes through which our customers can make processes more efficient and environmentally friendly, as well as solutions that are more resource-saving thanks to greater metering precision. The effectiveness of this concept is reflected in the large number of successful projects in the financial year.

Resource-saving products:
The Blechexpo in Stuttgart in November 2017 was the first public showing of our spray.xact 5000, a compressed-air-free lubrication solution for large-scale plant for forming vehicle body outer panels. This product is an evolutionary development of the spray.xact product portfolio and represents another highly flexible solution for contactless, precision application of oils and aqueous solutions to sheet metal blanks or coils. The precision, low-mist spraying technology that renders spray mist extraction unnecessary significantly cuts oil consumption for the customer, while bypassing the need for compressed air altogether. In view of the growing number of installations of these systems internationally, we have also increased the scope for worldwide remote access to the lubrication system’s controls. If servicing is required or in the event of operating errors, we have swift online access to the system with the result that downtimes can be significantly cut and costs reduced. The general response of customers who already use products of the spray.xact family is resoundingly positive, especially with regard to the resource-saving use of oil. Many customers have reported a significant oil saving of 40 to 60 percent. In the financial year, around € 275 thousand was invested in the development of the spray.xact 5000 and recognised as an intangible asset pursuant to IAS 38 (cf. Notes to the Consolidated Financial Statements in the notes to the balance sheet 3) "Intangible Assets”).

For process cooling applications, we developed our omega.eco series in the financial year. These liquid coolers involve high-efficiency plate heat exchangers. In conjunction with microchannel technology, refrigerant consumption is cut by up to 60 percent compared with conventional solutions. Energy costs can also be reduced markedly with the omega.eco: depending on the ambient temperature, the omega.eco independently establishes the energy-optimal operating point (SERP value) for the entire system.

Our delta.d eco and beta.c eco+ products for offset printing use performance-controlled refrigerant compressors that permit continuous adjustment of the cooling performance in line with actual requirements. If no cooling performance is needed, the compressor does not compress any refrigerant, so can “idle” off-load. This allows the power consumption to be reduced in proportion to the cooling performance required. In view of the huge potential saving without performance or operating safety being compromised, this technology is now standard in the largest individual series, the beta.c combined unit. In the beta.c eco+, a patented free cooler function additionally uses low ambient temperatures (<20°C) to cool the temperature control circuit and therefore the ink rollers of the press “directly”. This technology as the basis is a very efficient way to save energy because the chiller unit is not required when the free cooler function is active. Particularly pumps and fans that frequently run at partial load are often operated by frequency converter, where halving the operating speed can cut power consumption by over 80 percent.

gwk developed a modular-design multi-circuit temperature control system for mould temperature control by the name of integrat 80 in the financial year. By means of temperature difference control via frequency-controlled pumps, the energy consumption in the classic applications of segmented temperature control for plastic injection moulding can be reduced to about 30 percent. Thanks to the saving in energy costs alone, our customers recoup the outlay for the investment in less than one year.

The refrigerants regulation (F-gases regulation) means refrigerants will ultimately be in short supply. That fact has prompted us to change the refrigerant in all gwk compact chillers very early on. The effects of the refrigerants measured against their CO₂ equivalents are thus more than halved. In parallel, long-term trials involving refrigerants are currently running at the Meinerzhagen location, along with various group-wide projects to reduce the CO₂ equivalent.

At the LASER World of PHOTONICS show in Munich, Termotek GmbH presented several new products in laser cooling for small to medium performance categories. Alongside energy efficiency topics relating to performance-controlled components, it presented liquid cooling systems where the natural refrigerant iosobutane (R600a) is used. This is an environmentally friendly alternative to the customary refrigerants containing CFCs.

Our heat recovery concepts bring further potential savings for our customers and take their production operations closer to carbon neutrality. Waste heat that is generated in the printing process, for example, is led off centrally through a water-based recooling system and captured for reuse. technotrans offers direct solutions for utilising such waste heat, as well as solutions for putting waste heat to use in the building services engineering. Heat recovery concepts are tailored to what our customers want, depending on the circumstances and requirements.

e-mobility: the development of alternative drive concepts is coming into focus worldwide. technotrans has identified e-mobility as the future form of transport and offers the battery cooling technology that such systems require. The use of cooling and temperature control systems extends the operating life of high-performance batteries in electric vehicles and static energy storage devices. A constant, smooth temperature profile optimises the battery’s functioning. The zeta.line, a cooling and temperature control system for lithium-ion batteries, supercapacitors/ultracapacitors and stationary cooling systems for battery charging points, inverters and battery containers, was specially developed for these applications and assures the ideal operating temperature for each specific battery. Our systems are used for flash charging of electric buses, for example.
As part of the German government’s strategy to promote alternative fuels, there are plans to push the expansion of a full-coverage charging and refuelling infrastructure for all means of transport with electric, fuel-cell and natural-gas drive by 2020. Together with the major car manufacturers, which aim to install and operate a network of around 400 high-power charging stations along Europe’s arterial roads, we are currently drawing up cooling concepts for use in the rapid-charging process for these batteries. The first charging points for electric vehicles have already been successfully equipped with our cooling systems.

In addition to these products we are constantly investigating and developing – including on a group-wide scale – other projects and methods to increase customer-end energy efficiency with the aim of only using energy wherever and whenever it is actually needed.

Own production operations:
We constantly strive to use energy, resources and materials as efficiently as possible in our own production operations, too. We have equipped our paint shop at the Meinerzhagen location with a rotary heat exchanger that makes it possible to recover around 75 percent of the heat used in the drying process. The hot waste air is used to heat up the fresh air drawn in.

The processing of metals and other resources, especially at the production locations with greater value added, accounts for a sizeable portion of our value chain. We take care not to waste resources unnecessarily in the production process. In our development and design activities, for example, we endeavour to create products with minimal waste cuttings. We also strive to cut back on other waste generated in our working processes in production. Wherever it is unavoidable, it is sorted by type and sent for recycling. We attach considerable importance to information-sharing with our employees, whose ideas based on day-to-day work can make a valuable contribution.

We also regularly check what resources are used in our products and whether any of them pose a threat to the environment. Certain equipment made within the technotrans Group is subject to the RoHS II Directive and therefore also to CE identification requirements. Irrespective of the directive’s scope for our products, many customers expect the RoHS II Directive to be complied with and a corresponding CE declaration of conformity to be supplied. As part of its own strategy but also especially in the interest of its customers, technotrans has therefore set itself of the goal of making broadly RoHS-compliant equipment, even if products do not fall within the scope of this directive. Internal working processes were optimised and the work instructions updated in the 2017 financial year. We also recognise our responsibility for our supply chains. Because we buy in various components, we oblige our suppliers not to use any environmentally harmful substances and to give us a binding declaration to that effect. For orders of components, we also expect strict compliance with the RoHS II Directive. In addition, all principal suppliers of the German production locations are requested to make a declaration on the RoHS II Directive once a year. The materials that are RoHS-compliant are marked in the material master. It can therefore be traced back from an end product’s bill of materials whether a device meets the directive’s requirements so that we can declare it CE-conforming to our customers. The internal processes are to be implemented and harmonised at all production locations. However in view of the large number of suppliers, components and end products, this process has not yet been completed at all locations.

As part of our environmental, energy and quality management, we continuously record and analyse relevant performance indicators such as energy consumption indicators, so that we can identify measures for us to implement internally. Our subsidiary GWK Gesellschaft Wärme Kältetechnik mbH has been accredited to DIN EN ISO 50001:2011 since 2014. Measures and potential improvements identified by the annual monitoring audits are implemented. Positive results such as the marked reduction in power consumption at the Meinerzhagen location thanks to equipping the 11,600 m2 production halls with high-performance LED technology have already been confirmed since initial accreditation. All other German production locations have carried out DIN EN 16247-1 energy audits. We have not yet recorded an adequate number of performance indicators across all group locations for us to be able to provide a comprehensive report. The performance indicators refer to the German production locations, which constitute the most significant part of the technotrans Group.

Construction of new business premises of Termotek GmbH at the Baden-Baden location is planned for 2018 to provide extra capacity for the growth that the company is targeting. Sustainable energy and heating concepts have been included in the plans for the building. We currently plan to equip one hall with a highly sustainable heating concept in accordance with the Energy Saving Ordinance. This includes the installation of a water-to-water heat pump and ground collectors. We will then be able to make better use of the natural resources, as well as save and reuse the energy that we need for testing our equipment.

How to make use of the available energy is an important business management factor for industry. Businesses are increasingly focusing on climate-neutral production.

In both ecological and economic terms, optimum energy management is a mainstay of our corporate success. We will continue to treat environmental protection and sustainability in our product development and use of resources as a high priority. We will also ensure that the applicable globally valid standards and guidelines are implemented and observed throughout the group.

b) Employee matters

Training and qualification:
Committed employees with outstanding skills and abilities are the bedrock of our success. Our human resources work therefore revolves around careful selection, targeted support and continuing training. We attach high importance especially to developing specialist and interdisciplinary skills, and permanently maintaining the professional capabilities of specialists and managers. Only by offering our employees the right advancement and continuing training options can we be sure we will continue to evolve as an organisation.

For many years we have treated training as a high priority and get involved in providing training for juniors. We see training young people on the one hand as a social responsibility that we are glad to honour, and on the other hand as something we do in our own interests. We identify demographic change in society and the shortage of skilled workers as a major challenge. By providing training, including above and beyond our own requirements, we pre-empt this problem by being able to recruit people primarily from our own ranks.

The number of apprentices in the group came to 112 at December 31, 2017 (previous year: 116). The proportion of apprentices at the German group companies was therefore around 10 percent, above the industry average of 7.3 percent. The spectrum of vocational qualifications in the technotrans Group is broad, and is growing year by year in line with market requirements.

We aim to prepare our apprentices optimally for the future world of work: our production companies have their own training workshops, including for example an electrics training room specially equipped for apprentices, and apprentices attend in-house instruction and training courses in various departments. Our instructors, too, receive regular training. The many awards and distinctions that our apprentices again earned in 2017 reflect how successful training in the technotrans Group is.

To broaden the horizons of our apprentices during their training, we encourage exchanges between apprentices and their counterparts at other group companies. We plan to build on this idea of specialist dialogues within the group.

Training as well as vital advancement measures were again provided for many employees in 2017 to keep them well qualified for the challenges of the future. We call upon both internal experts from the individual departments and external trainers. In the course of inducting new employees in 2017, we provided intensive training for all international service engineers to conserve group-wide product knowledge, for example. Each employee discusses the envisaged qualification measure with their line manager, and Human Resources is brought in for further-reaching measures. The aim of these meetings is to customise continuing training to the needs of the individual employee. Over the next few years we aim to systematise human resources development activities in the form of training catalogues and provide suitable figures for greater ease of comparison.

Remuneration and employee rights:
Employees are paid for their work in line with the market, and receive variable remuneration according to their position. In recent years a standardised remuneration system has been introduced at the main location in Sassenberg and at a number of other German locations, too. Under this system, employees are assigned to grades in line with their position; each grade in turn corresponds to a specific, market-oriented remuneration band. At the main locations, our remuneration system is also based on an annual performance appraisal. All managers are suitably trained to promote the fair assessment of our employees. In 2017 this remuneration system was introduced at KLH at its Bad Doberan location, with gwk and gds Sprachenwelt set to follow in 2018. The aim is to roll out the remuneration system across all major locations in the medium term, in order to develop a sustainable human resources policy and extend it uniformly across the entire technotrans Group.

Managers receive (management) bonuses that are agreed individually in their contracts and depend half on the attainment of company targets, and half on their personal performance. Annual decisions on percentage pay increases are negotiated between the Board of Management and the Works Council. Pay increases averaging two percent were agreed for the 2017 financial year. The average pay increase for 2018 will be three percent. We also offer various fringe benefits. These benefits reflect the prevailing local and statutory considerations and scope. The extent of the benefits therefore varies from one location to another. The benefits include retirement benefit contributions, for example, or employer-financed occupational health insurance. We will step up the role we play especially in employer-financed retirement benefits to fill or at least reduce a future gap in our employees’ retirement benefits.

Our products are all about high quality and operator safety. We also aim to make the workplace as safe as possible for our employees. Our managers ensure that statutory health and safety regulations are complied with at the locations. At the production locations in particular, there are individual concepts such as techno-safe at Sassenberg. The purpose of these concepts is to ensure the statutory requirements are met, but also that action can be taken at short notice if necessary. They also cover all fire protection, occupational safety and environmental protection measures. Alongside the statutory requirements such as holding regular occupational safety committee meetings, there are for example voluntary site inspections or meetings where first responders can share insights so that potential hazards can be spotted early on and addressed. The gratifyingly low accident rate for the group demonstrates just how effective these concepts are.

The employees of the technotrans Group’s German locations formed a Group Works Council in the 2017 financial year. Working professionally with the employee representatives, which admit neither preferential nor discriminatory treatment, is part of our corporate culture. We work openly and trustfully with the employee representatives, maintain a constructive and cooperative dialogue, and always strive for a fair balance of interests. The same applies in the ongoing negotiations of the special negotiating committee with the company management in connection with the planned modifying conversion of technotrans AG into a European Company (SE).

Equality of opportunity:
The personality and qualifications of our employees matter. In the group companies, we do not tolerate discrimination of any kind against employees in particular on account of age, nationality, skin colour, gender, religion, social background or disability. We adopt a zero tolerance stance towards any such misconduct at the workplace. Human resources decisions such as appointments, promotions, remuneration, dismissals etc. are reached in accordance with these principles. We value the differences and diverse qualities in our employees. We would like to create a corporate culture that is characterised by open, fair and respectful treatment of one another. These principles are enshrined in our worldwide Code of Conduct and are practised in our daily dealings. For example, we give refugees the chance to get to know everyday working life in Germany. We have teamed up with a university on a research project with the aim of identifying how tapping cultural diversity in day-to-day work can bring success for small and medium-sized companies, and what practical courses of action can be recommended as a result.

One important priority for activities that strive to promote diversity is to increase the proportion of female managers. Women as a proportion of the overall workforce remained broadly unchanged from the prior-year level, at 21.1 percent across the group at the reporting date of December 31, 2017.

We give our employees various options for balancing the demands of working and private life. These include flexible working hours models, such as flexitime and a variety of part-time models. We therefore make it easier especially for women to resume their career during and after a period of parental leave. Over 30 percent of all women across the group take up the opportunity to work part-time. In addition, a few years ago technotrans established a partnership with a municipal kindergarten at the Sassenberg location in order to provide flexible child care options for children who have not yet reached school age. These arrangements, too, are aimed especially at women who would like to keep pursuing their career objectives while bringing up a family.

Only with satisfied, motivated employees will we be able to secure the long-term business success of the group. Open, amicable and fair communication between employees is firmly embedded in our corporate culture. Our entire human resources work is geared towards promoting that culture and increasing our attractiveness as an employer. We conduct exit interviews with our employees to identify the causes of fluctuations and the weak points in the company. At these interviews between Human Resources and the exiting employee, we ask targeted questions to glean ideally objective information on the reasons why the employee is leaving. The fluctuation rate for the group was again very low in the financial year.

c) Social matters

Data protection and data security are also matters of importance for technotrans. The spread of digitalisation and connectivity goes hand in hand with tougher statutory requirements. We are prepared to assume responsibility here, because trust-based cooperation with our employees and business partners is a cornerstone of compliance with data protection requirements. Personal data that we record and save is ring-fenced for its intended purpose and processed in keeping with the applicable data protection laws. Our data protection concept is currently being updated to bring it in line with the current General Data Protection Regulation.

Our activities are not limited to our core business. As an internationally active enterprise, we also believe we have a social role to play. We have been an active supporter of Friedensdorf International (Aktion Friedensdorf e.V.) since 2011 because it performs constructive work with long-term benefits for the future. This charity attends to children from war-torn and crisis zones, supporting them with medical and psychological help, education, projects and relief supplies.

We also get involved in a great many local projects and initiatives in the home regions of our locations, because we feel particularly strong ties to the regions in which we want to do business in the long term. The framework conditions at every location are different; our social commitment may therefore vary in emphasis from place to place, and comprise both strategic partnerships and individual employee campaigns. Our social commitment activities are handled regionally in consultation with Group HQ.

technotrans upholds the protection of human rights, advocates compliance with labour standards, and rejects child and forced labour. With the commitment to the UN Global Compact initiative and in enshrining these principles in the technotrans Code of Conduct, they take on binding character for our employees. The management of each local entity is responsible for implementing national standards. Compliance with them is discussed with the management and checked in the course of compliance audits. The audit brought to light no departures from the application of the principles in respect of labour standards and human rights in 2017.

d) Respect for human rights

Equal opportunities, equal rights, fairness as well as mutual acceptance and tolerance are the hallmarks of technotrans’ corporate culture. We appreciate diversity and differences within our organisation and business partners. technotrans has the goal of seeing all employees operate in conformity with internationally recognised human rights as well as with the principal labour and social standards.

technotrans upholds the protection of human rights, advocates compliance with labour standards, and rejects child and forced labour. With the commitment to the UN Global Compact initiative and in enshrining these principles in the technotrans Code of Conduct, they take on binding character for our employees. The management of each local entity is responsible for implementing national standards. Compliance with them is discussed with the management and checked in the course of compliance audits. The audit brought to light no departures from the application of the principles in respect of labour standards and human rights in 2017.

Nor do we tolerate human rights abuses by our suppliers. New, key suppliers of technotrans AG are put through a standardised process and are only entered in our system and given clearance as a supplier if they achieve a positive rating. The rating incorporates such aspects as compliance with applicable working conditions, compliance with social standards (child and forced labour, discrimination) as well as environmental protection issues. The production locations of our subsidiaries have implemented similar processes, though to some extent they do not yet place the desired level of emphasis on sustainability aspects. Nevertheless, the aim is to standardise these processes, too, along with the continuing streamlining of purchasing processes group-wide.

In view of the high number of suppliers and sub-suppliers, we have only limited scope to supervise and monitor the early section of the supply chain and the associated process steps. Because no contractual relationship exists between technotrans and the sub-suppliers of our suppliers, we do not have any legal basis for intervening. For these indirect relationships, we can merely obtain a commitment from our suppliers to sensitise or obligate their upstream suppliers. Our goal here is to improve our insight into the entire supply chain.

We address compliance with environmental aspects along with occupational safety through the regular supplier audits and include the findings in the audits. As part of the process of integrating newly acquired companies and rolling out group accreditation, we introduce the currently valid standards at those companies, too. The aim is to extend and standardise the processes further throughout the group.

e) Combating of corruption and bribery

The relationship with all business partners should be based on quality, reliability, competitive prices and observance of ecological and social standards. Complying with these standards has have built up technotrans’ good reputation in the markets, thus permanently facilitating its access to new customers.

To protect the group against potential losses, we maintain transparency and implement internal control mechanisms. Compliance with our anti-corruption guideline – valid company-wide and forming part of the technotrans Code of Conduct – plays a special role in this. Every employee is obliged to inform their line manager of any form of attempted bribery. In cases of doubt, Legal Support at technotrans AG or the Board of Management are to be notified. Special contract components and blanket agreements must be agreed with the Legal Support corporate function. Adherence to these compliance rules is examined by means of spot checks, for example. This is our way of taking preventive action on corruption. The Board of Management moreover maintains a regular dialogue with our subsidiaries.

No cases of corruption came to our attention in the 2017 financial year. Moving forward, too, the group will increasingly emphasise compliance with its anti-corruption principles and with the statutory requirements. During the integration of newly acquired companies, the employees of those companies have been and will be sensitised to this issue, in order to uphold and assure integrity and compliance with the law throughout the entire group. The aim is to apply these awareness-raising measures equally in future integration projects.